Exercise 5-10 Record the adjustment for uncollectible accounts using the aging method (LO4)
[The following information applies to the questions displayed below.]
Mercy Hospital has the following balances on December 31, 2015, before any adjustment: Accounts Receivable = $51,000; Allowance for Uncollectible Accounts = $1,400 (credit). Mercy estimates uncollectible accounts based on an aging of accounts receivable as shown below.
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Age Group | Amount Receivable | Estimated Percent Uncollectible |
Not yet due | $ 31,000 | 10% |
0 – 30 days past due | 9,100 | 15% |
31 – 90 days past due | 6,100 | 45% |
More than 90 days past due | 4,800 | 85% |
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Total | $ 51,000 | |
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Required: | |
1. |
Estimate the amount of uncollectible receivables.
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2. |
Record the adjustment for uncollectible accounts on December 31, 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2.
Bad debt expense: $11,290 – $1,400 = $9,890 |
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